DULLES, Va.Dec. 8, 2006--Orbital Sciences Corporation (NYSE:ORB) today updated its 2007 earnings per share and free cash flow guidance following the pricing of yesterday's offering of $143.75 million 2-7/16% convertible senior subordinated notes due 2027, which includes the exercise in full by the initial purchasers of their over-allotment option to purchase up to an additional $18.75 million aggregate principal amount of the notes. The company also is repurchasing 2,655,300 outstanding shares of its common stock, at a price of $18.83 per share, for a total of approximately $50 million. The closing of the notes offering and share repurchase is expected to occur on December 13, 2006.

Orbital intends to use the net proceeds from the sale of the notes, together with cash on hand, to repurchase its outstanding 9% senior notes due 2011 and to fund the above-described share repurchase.

The convertible notes are structured with a Net Share Settlement feature, requiring the company to settle the principal amount of the convertible notes upon conversion in cash and any value above the principal amount in cash, stock or any combination thereof. By incorporating Net Share Settlement into the notes, the company will exclude any shares from its diluted share count as long as the company's stock price is below the conversion price.

"The debt offering and share repurchase announced yesterday is another significant step forward in optimizing the company's capital structure, which is one of several key elements in our strategy to achieve double-digit annual earnings growth over the coming years," said Mr. David W. Thompson, Orbital's Chairman and Chief Executive Officer. "As a result of these transactions, Orbital will greatly reduce its annual interest expense, continue its multi-year share repurchase program and enhance the company's earnings per share and cash flow in 2007 and future years."

2007 Financial Guidance Update

As a result of the debt refinancing and share repurchase transactions, Orbital has updated its previously issued preliminary financial guidance for 2007. The company now expects to generate 2007 earnings per share in the range of $0.72 to $0.77, up from the previous range of $0.67 to $0.72. The company is basing its estimates on approximately 61 million average diluted shares outstanding and assumes the completion of the refinancing and share repurchase transactions. Also related to the transaction, Orbital increased its free cash flow estimate for 2007 by $5 million to a range of between $50 and $55 million, up from the previous preliminary range of $45 to $50 million. The company also indicated that in connection with this new financing and repurchase of its outstanding 9% senior notes due 2011, it expects to record a one-time after-tax debt extinguishment charge of approximately $6 million in the fourth quarter of 2006. Consistent with Orbital's past practices, the company will provide updated 2007 financial guidance when it reports fourth quarter and year-end 2006 results early next year.

About Orbital

Orbital develops and manufactures small rockets and space systems for commercial, military and civil government customers. Orbital's primary products are satellites and launch vehicles, including low-orbit, geosynchronous-orbit and planetary spacecraft for communications, remote sensing, scientific and defense missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target vehicles. Orbital also offers space-related technical services to government agencies and develops and builds satellite-based transportation management systems for public transit agencies and private vehicle fleet operators.

More information about Orbital can be found at http://www.orbital.com

Safe Harbor Statement

Certain statements in this press release may be forward-looking in nature or "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include for example, our expectations regarding the completion of the sale of the convertible notes and the repurchase of the existing senior notes and common stock, as well as our financial guidance. Such forward-looking statements are subject to risks, trends and uncertainties that could cause the actual results or performance of the company to be materially different from the forward-looking statement. Uncertainty surrounding factors such as continued government support and funding for key space and defense programs, product performance and market acceptance of products and technologies, the outcome of the government investigation, as well as other risk factors and business considerations described in the company's SEC filings, including its annual report on Form 10-K/A, could impact Orbital's actual financial and operational results. Orbital assumes no obligation for updating the information contained in this press release.


    CONTACT: Orbital Sciences Corporation
             Public and Investor Relations:
             Barron Beneski, 703-406-5528
             Beneski.barron@orbital.com

    SOURCE: Orbital Sciences Corporation